A prominent Asia investment analyst says significantly better economic growth in Japan and the rest of Asia is only a distant possibility. He says, however, that China will continue its swift economic development.

Marc Faber, known as "Dr. Doom," says the world's financial markets may remain volatile for now. The Hong Kong-based investment analyst says commodity prices and interest rates are likely to start rising soon, but prices for manufactured goods will not be able to rise much.

Mr. Faber, who is known in Asia for being pessimistic about markets, is upbeat about China. In a speech at an investment conference Friday, he predicted that China will continue to attract manufacturers from around the world. "There will be a huge dislocation in terms of companies shutting down production in some relatively expensive countries and producing in China, whereby China will probably become the workshop of the world," he said. "And this process will obviously have negative implications on the macro-economic background of countries like Japan, South Korea and Taiwan."

He adds that Japan's economy will face even further challenges as more and more companies move factories to China. However, Mr. Faber says, the profits of Japanese companies should benefit from cheap labor in China. Mr. Faber says China's rise as a manufacturing power will shift the economic outlook for all of Asia. Many communities in the region could be forced to find new ways to make livings. "If you consider, after 1949, the Chinese essentially closed the economy and gave the opportunity for Taiwan, South Korea, and certainly, Hong Kong to rise and thrive," he said. "And as China opens up, the centers of production will move back into China, and you will have an entire change of economic geography in Asia."

Mr. Faber says there is great room for growth in China's domestic consumer food industry and service sector. But the industries likely to experience the most growth in China are residential property and tourism.